Victoria’s Secret’s direct-to-consumer transformation began long before the lingerie giant decided to update its image. It started around 2014, when the brand — then part of L Brands, which is now Bath & Body Works, Inc. — decided to accelerate its global reach beyond the U.S. market.
“Our catalogue heritage allowed us to get brand residence significantly overseas,” Ishan Patel, chief operating officer of Victoria’s Secret digital, said Sunday at the National Retail Federation’s Big Show in New York. “We were shipping to over 200 countries long before we were online, but it was a very U.S.-centric experience: U.S. dollars, in English, payment types were only really present in the U.S. — Visa, Mastercard and Amex at the time — and we were shipping out of Ohio. But in 2014, we really started to think about this …. We moved into five markets where we really tried to create the [same] experience with language, currency and merchandising [abroad]: Canada, Australia, U.K., France, Germany, and then later Spain. And then, we really started to gain more understanding of those markets.”
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The efforts have led to an international expansion that today spans more than 60 countries — most recently entering locales like Milan, Israel and India — 40 currencies and 20 payment types, along with multiple franchise partners. And while the firm has lost market share in recent years domestically (down from 32 percent of the U.S. women’s intimate apparel market in 2015 to roughly 20 percent in 2021, according to The NPD Group’s consumer-tracking service) before its spin-off from Bath & Body Works last year, Victoria’s Secret’s international revenues are still sizable. In the most recent quarter, Victoria’s Secret’s international business generated $114 million in revenues, prompting the company to issue a positive outlook ahead of the all-important holiday shopping season.
But Patel cautioned other retailers that expansion is no easy task. There are nuances to moving into new markets and it’s not a one-size-fits-all proposition.
“There is no country called international,” he said. “It’s a country-by-country, market-by-market assessment; it’s breaking through that mind-set to understand that in each distinct market there will be variables and synergies and distortions from your home market that you need to understand. We have different areas of distortion within our own core categories and assortment that we really need to understand. And in doing so, we’re actually meeting the consumer where she is. We’re meeting the consumer relative to what’s relevant and important to her.”
“And it goes so much more than brand language. [It’s] considering the touch points,” Patel continued. “Moving into a new market, it’s a bit daunting. One of the [other] things that we’ve learned along the way is just spending the time, making sense of the market, understanding the consumer; speaking to a lot of people [locally]. The partners that you do have in maybe your own market that you’re operating that maybe have the experience overseas, speaking to local agencies, speaking to suppliers who have experience [there] with the consumer itself. And as you build up that picture of [a] brand, how well your brand resonates, that is your flying star. It’s understanding the cost of entry, the competition. All the research that is super important.
“It’s an infinite game,” he added. “There is no end point. You’re constantly striving to understand where the market is going to be, what the consumer mind-set is going to be, what’s happening with the competition and what are the adjustments that we need to make.”
The executive said another question retailers should ask is if expansion is even worth the effort in particular locations.
“One thing that you have to understand is the size of your client [base],” Patel said. “Some markets — based on your path, your segment, your specialism — are much more lucrative than others.”
In addition, things like creating trust during the checkout process (no hidden fees and clear delivery dates), providing a variety of secure payment methods and the option to return are essential in creating loyalty among new customers.
“It doesn’t matter how amazing your brand is or your assortment is, if you get right down to that checkout and then you have friction there… that’s a bad move there,” Patel said. “That local ability to return quickly, to ensure that her credit is applied as quickly as possible, that convenience factor is really important so that she has one less reason to say no [to the brand]. It reduces the barrier of entry to the brand.
“The big thing for us as a retailer, and for anyone here as a brand, is understanding [that] you have obligations, too. And I think, understanding how to ensure those obligations relative to the security of your clients,” Patel continued. “[You built trust] by constantly fulfilling on that commitment and that promise and every time that promise is not fulfilled someone will comment on that. They’re going to comment in reviews; they’re going to comment in a social media post. [Consumers] are engaging in that. They’re getting their trust from other consumers; it’s not just what the brand is saying. They’re getting that trust from others who have had experiences [with the brand.] So you [as the brand] are building on that trust. You’re building that relationship by constantly delivering that promise.”